Economics is fundamentally unscientific. The economic crisis has speeded the shift of power to emergent economies. In Britain and the USA the theory of 'rational markets' removed controls from the finance sector, and things can still get yet worse. Read my book, No Confidence: The Brexit Vote and Economics - http://amzn.eu/ayGznkp

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Tuesday, 30 December 2014

Much of upland Britain is maintained in its attractive state thanks to the use of the land as sheep and cattle grazing, and for the related haymaking or silage recovery. Both beef and dairy herds of cattle are maintained. The current prices of beef and lamb make the meat sector remunerative: and the increasing preference for fresh meat in the emergent economies - most obviously in China - bodes well for future meat prices. The sad concomitant of this fact is that the poor in the UK and other formerly industrial countries, faced by declining real purchasing power, are able to eat less prime meat: and for millions of families it is disappearing from the list of available options. The affordable alternatives of sausage and ready meals contribute to the wave of obesity that is engulfing at least half of the beneficiary population and making them less suitable for employment.

At the same time in recent years there has emerged a significant global surplus of milk. While the majority of consumers are still able to exercise a preference for fresh milk, and can check on its provenance, even the supermarket milk supply is subject to global competition. For conversion to butter and cheese the source of milk is irrelevant provided the quality of the milk is guaranteed. Hence while there is a significant segment of customers who want - and will afford - locally produced fresh milk for household use [and especially for children], the demand for bulk milk is not differentiated in that way. Thus the purchase of the bulk of milk from farms is dominated by large wholesalers, who in turn are forced to compete for business from supermarket chains and manufacturers. Simple market forces dictate that the prices offered to farmers decline; and they are now well below the level at which hill-farming for milk is viable. Even many lowland cattle farmers have gone out of the milk business, though many of them were able to operate much larger dairy herds than their uplands fellow-producers.

The potential outcome from this is that the whole way of life of upland farming will change from mixed dairy and meat farming to just meat production [which in its turn will also be subject to the variability of world demand]. Without daily collections of fresh milk from significant regions of the UK the transport system and the use of local resources such as petrol stations would decline, and the increasingly under-used transport infrastructure would become more expensive for the reduced local population to maintain. There are already manifold signs that this is happening.

With the government under pressure to reduce spending, 'subsidies' for rural populations come under threat: hence rural post offices and doctor's surgeries, sub-libraries and smaller schools are becoming extinct; subsidies to virtually-unused [and unaffordable] bus services are cut and the shrinking incomes of their clientele make more pubs non-viable every month. As these processes accumulate the ability of farmers to maintain the visual character of the countryside diminishes.

There should be a national policy on this disappearance of the national heritage; but it will not happen under the current rule of the political class. Economics will trample over humanity and this example of dereliction and decay will become conspicuous only when it is unaffordable to do anything significantly to correct the damage.

Friday, 26 December 2014

I was intrigued by a snippet of News on BBC Radio 3 during Breakfast this morning. Someone has calculated, on the basis of sample data, that 49% of clergy worked on Christmas Day. As a son of the parsonage I would have expected the ratio to be nearer 99% and I am bemused at what 51% of the clergy can have been up to. There are far too many 'retired' priests and bishops - their pensions are draining the Church of England's residual coffers after generations of daft management of the accumulated assets of centuries - but I would have expected that most of those would have volunteered to take services [or to assist] at some of the thousands of churches, chapels and other conventicles that no longer have their own stipendiary cleric.

Christmas is one of the greatest festivals of the church and one would expect - and hope, even - that the clergy would want to have been engaged. How very sad is the situation that seems to be indicated by the raw fact.

Another sad and silly situation in churches that commentators now almost always expect choirmasters and organists to be separate people. In the great days of English choral singing the organist and choirmaster were one person, who was heard but not seen during services. Such men [rarely women] were excellent choir trainers: and once trained, the choir got on with it while the boss accompanied the singing and played the voluntary. Now in the great majority of cases some show-off jackanapes demonstrates daily that they are not competent to train the choir and trust them to deliver, so they appear waving their arms in front of the choir thinking to receive plaudits for their incompetence. This is one of the many ways in which the third quarter of the twentieth century showed a serious decline in standards of professional competence.

Wednesday, 24 December 2014

The latest balance-of-payments data for the UK demonstrate the plenitude of the failure of Gideon Osborne's purported plan to 'restore' the British economy. The data are the worst ever: imports are up, exports are wallowing and 'remittances to overseas direct investors' are alarming. Those remittances include the tribute that British customers pay to the foreign owners of the gas, electricity, water and railway industries that were snatched from the British public and sold cheaply in order to enable the Thatcher government and its successors show less of a deficit on public spending.

When he took office as Chancellor of the Exchequer Osborne declared his intention to rebalance the economy: away from consumption by the public sector to more private investment, away from a deficit to a surplus on overseas trade driven by strong growth of exports. None of this has been achieved. Public services have generally declined as government spending has been cut and capped. The benefits system has continued to suck in more of the nation's turnover even as benefit payments to individuals and households have been kept in check.

Investment has stagnated. Perhaps most alarmingly, as the government continues to close 'dirty' power stations no new investment has been made in power generation for seven years. Provision has been made in legislation and agreements with companies to compensate the alien owners of power systems for any risk that may remain in new construction [gas or nuclear] - from the pockets of British consumers, of course - but nothing has actually been built: or begun.

Look at the new trade figures, out today. Read what it says about it in the papers.

Then remember Winston Churchill's warning to the USA in 1941: that if Britain's resistance to the Nazis failed the whole world [including the USA] would sink into a new dark age, made darker by the lights of a perverted science.

Gideon and his Treasury team are guiding Britain into a new, darker age. With his own 'good' degree in Economics and surrounded by a like-minded cohort of acolytes he is driving the nation along the path set by the perverse pseudo-science of Economics. He has no idea of the immensity of the responsibility that he carries for this developing disaster. That in no way exculpates him from the damage that he is doing.

Thursday, 18 December 2014

A minor element in the News today is the information that local authorities are braced for more cuts to their allocation from central government. This is particularly important because for several years local councils have not been able to make compensating increases in local taxes and charges - notably rates - when government cuts the direct funding of their budget for things that the councillors consider it important to deliver to their constituents. Within the past week the government has tried to remove the 'nice little earner' of penalty charges for parking from the array of sources: that will get the coalition partners a few votes in May at the cost of real human misery.

The coalition government had previously offered most local authorities the sop that if they do not charge more in local levies, the state will make up some of the deficit from central funds. Now the pruning of the national expenditure has reached the point where the Chancellor can no longer push some pennies in their direction and tell them to make do with that.

Soft services, starting with libraries [again] will be cut back. Care for the aged and disabled will be rationed more tightly. School maintenance programmes will again be delayed. Jobs will be held open for longer, and more vacant posts will quietly be frozen. As always, the spin spivs have stories ready with which to claim that the modern world is coming to the rescue of the old: this week's example is that there is a prospect of getting a computerised national libraries ticket, so that anyone from anywhere can go to a town whose library has a book that they want to read, and borrow the copy. In this world of funding cuts and petty theft, ensuring the security of the stock under such a system would be hugely expensive; and insuring it would be unaffordable. Most people do not have the IT skills, the energy, the time or money for the fares to be able to access such a system; and the costs of running it remotely after the cuts would be prohibitive.

The Tories claim that future cuts in public spending will have to be greater than those so far made by the coalition if the deficit is to be cleared; and that the pace of cutting will have to be speeded up. Labour also promise cuts, but in a much gentler pattern that would never lead to ending the deficit on annual spending by the state. Either proposal would result in massively worse public and social services. The reduced police force would be had-pressed to monitor dissident movements or to contain riots.

Whatever comfortable view of British society David Cameron has adopted from Eton, Oxford and the Witney constituency stands to be corrected quickly and brutally. Milliband may have a slightly fuller perspective from the very limited time that he has spent in his northern constituency, but he has no preparation for the realities that will scream for redress if the present destructive policies are continued.

The comfortable notion that the ghettoised majority of Muslims who hold British passports will maintain 'British values' as tighter bounds are set to the benefits system will not survive for much longer: and their lack of empathy [or even of passing acquaintance] with their 'white' fellow-disbeneficiaries will exacerbate tension that will too easily be dubbed 'racist'.

Saturday, 13 December 2014

As every user of a traditional open market knows, there are great advantages for the customer if traders in many areas of business have to compete. On a larger scale, examples like Marx and Spencer versus Waitrose [on food] and versus Next [on clothes] are beneficial to customers and healthy for capitalism.

But some manifestations of the Economist-driven obsession with competition are counter-productive. One of the most obvious is the encouragement of competition to Royal Mail. Royal Mail is obliged to meet an obligation to deliver at least five days a week to every postal address in the land [with the specific exception of a few exceptionally remote addresses]: historically this was tantamount to creating a natural monopoly. It would be an insane waste of resources to construct a system that would also have the resources to compete with Royal Mail for every address in the country, every weekday. But in allowing 'competition' in urban areas and their immediate hinterland a huge unfair advantage is conferred on Royal Mail's competitors. And now at least one of them has proved to be under-resourced to meet the current demand: so while Royal Mail is 'rationalising' its service delivery and cutting its workforce, flashy competitors are failing to deliver as promised: but they are not under the universal service obligation, so failing to deliver what they promise to their customers does not draw down regulatory sanctions - as it could with Royal Mail. So in the aggregate the service is worse.

Equally bad is the failure of the National Air Traffic control computer for southern England. By making the 'company' 51% 'private' government has attempted to evade responsibility for notorious under-investment. Yesterday chickens came home to roost, and once such a process begins it can only continue to let down airlines and their passengers - the paying customers for the service. In many cases privatisation has simply allowed foreign owners permanently to tax British consumers: in others, like NATS, supposed responsibility for the false economy of underinvestment has been transferred to a firm; but all users suffer for it.

Thursday, 11 December 2014

Every spiv in and out of government is at some time bitten by the bug that says "Let just a little bit of the Green Belt be used for housing".

Political Economy has a very good answer to that. Homes built are added to the national wealth just once; they can be counted as part of the 'output' of the years in which they are first sold, to occupants or to landlords.

But in every future year that land is out of production for farming, or for leisure activities that can be replaced by farms; as happened to a huge acreage especially in the Second World War.

The facts and figures for High-Speed Two indicate the costs of building railways. In my youth I never understood why the depredations of Dr Beeching were not shown as negative on the national balance sheet. The cost of building railways, per mile, is horrendous: so the loss to the national wealth of tearing them up should have been shown. National income probably showed negative growth in that period. The same is true of steelworks, dockyards and other installations that had a long potential future existence until they were wantonly destroyed in the pursuit of short-term policies, chiefly under the Thatcher regime.

Inflating the amount of money that can be borrowed per house adds nothing to real national production. The lending officers of building societies and the estate agents with the highest 'productivity' add nothing to real national production: their labour in not substantially productive, regardless of how much 'profit' it turns in to churn on through the consumer-driven economy. This is quintessentially true of resales of houses that were first built on greenfield sites.

Restoration of the many despoiled old urban areas of the UK remains an urgent task; and the need for homes is desperate. Looking to the green belt to provide easy pickings [usually for the better-off members of society] is distracting and destructive.

Monday, 8 December 2014

Today the Archbishop of Canterbury is publicising a report, prepared under the direction of the Bishop of Truro and the excellent Frank Field MP, that heavily castigates the extent of the need of British families to resort to food banks in this year of grace 2014.

The need is largely due to the fact that families are literally penniless in many thousands of cases where benefits are due to be paid, but there are institutional and bureaucratic delays in the release of the extremely modest funds to which the families are entitled. But there are many other causes of the distressing circumstance where a parent literally cannot feed a child - or herself - of which only a minority are fecklessness, cretinism, intoxication or narcotic catalepsy. Society is failing, and the economy is failing; and government has no remedy.

Meanwhile, on the same day, the Prime Minister warns his cohorts that Britain's "prosperity" would be at threat if Labour and/or the Liberal democrats will the forthcoming general election. One may ask, "What prosperity?" As the government promises some £55billion a year of cuts to public expenditure by 2020, on top of the approximately £35billion annual 'savings' so far achieved, it is legitimate to ask what of the economy, and of the social structure, will survive?

The Chief Constable of Lincolnshire has asked the Home Secretary to explain how that huge county can be policed if the foreshadowed cuts are made: we can expect no direct answer to that question.

Clegg has no answer.
Milliband has no answer.

And now Alex Salmond reckons that he can exploit an electoral stalemate next May to pursue his obsessive agenda in defiance of the democratic vote of the Scots people in the recent referendum.
In his speech announcing his intention to disrupt the UK parliament, Salmond repeated the assertion - which is almost certainly true - that the one way for him to forfeit the trust of his followers would be to enter into any sort of pact with the Conservatives.

The rump of the LibDem party is also likely to decide after the May election that their role in any future government will be with Labour.

In the unlikely event that UKIP get enough seats to swing a hung parliament, they will exact a tremendous toll for coalition with the Conservatives.

Friday, 5 December 2014

The BBC has been very naughty. Its news teams have told the country that by the end of the next Parliament - if Gideon Osborne is elected to get away with it - public spending will be at its lowest for 80 years. The fact that this is a reasonable extrapolation from his own figures is not relevant, from his perspective on this political argument.

The population of the UK is around 50% greater than it was in 1935 and it is growing rapidly. The amount of money that is taken in as taxes and returned to the people through schools, the Health Service, benefits and other channels, is massively greater, per head, than it was in 1935. So the removal of health, help and support from every citizen [whether or not they are deserving of all that they get] would be dramatic. It is not achievable, because the state would have been brought down by rioting mobs long before the target was hit. Once people have nothing - literally nothing - to loose, they will ally with others in the same position; and the depleted, demoralised police force will be incapable of stopping the destruction.

One has to go back to 1848 to find any comparable situation to that which could exist in the UK by 2018. The situation then was that the 1834 Poor Law reform had taken effect, the Workhouses had been built and were fully functional, and [at least in principle] all the cash benefits that had been available under the Speenhamland System had been withdrawn. Many of the marginally-employed found it very hard even to put bread on the table for their families: and the Liberals [not least, the new capitalist class] blamed the high price of corn, not the low wages that they paid, for the distress that was evident among the working poor. Capitalist-funded orators ranged the country arguing against the landlord class and the farmers, who benefitted from the high price of food. By the mid eighteen-forties the Russian Empire, the USA and Canada had all become capable of exporting large quantities of grain; but Britain kept it out by imposing the tariff specified in the Corn Act. The Anti-Corn-Law League invested heavily in the campaign to keep industrial profits high and wages low, and hundreds of thousands of people signed the petition demanding repeal. There was a clear threat that violent riots would be staged if the demand was not met. Tens of thousands of middle-class and aristocratic men signed up as special constables; rather looking forward to being licensed to crack a few riotous heads. Among them was the exiled Louis Napoleon Bonaparte, who was soon to return to France, be elected President and then declare himself Emperor Napoleon III.

Sir Robert Peel's government duly climbed down, the Tory party was rent apart, and the Corn Act was repealed. This settled Britain a low-wage country, which enabled our industries to remain competitive on price even as German and American firms adopted newer technology to produce better products. The cost of becoming dependent on imported food only became fully apparent in the losses to the mercantile marine in the First World War; and the UK only began to pay high prices for food when it entered the EU and the Common Agricultural Policy in 1973.

Politics in 2015 will enter a new and frightening period. Labour is largely responsible for the mess that we are in: the Tories and the LibDems have not understood it, so have made it worse.

Monday, 1 December 2014

The usually-arrogant Chancellor, Gideon Osborne, is occasionally rattled when he comes under challenge: then he quacks like a cartoon duck. His place in history will be that of a pathetic puddle-duck, swimming aimlessly on a polluted pond while he is under the impression that he is a Master of the Universe.

His boasts about the strength and the growth of the British economy now face the fact that the economy is really so weak that taxation revenues are falling - spectacularly. As this blog has reported for some years now, the growth has been of spending by consumers: largely on imported goods, or on goods that are produced by foreign-owned firms so that any profit is allocated abroad and not to the development of the UK economy. Much of that spending is supported by benefits: including in-work benefits because mass wages are not sufficient to maintain families decently. So even with 20% VAT payable on some items, the exemptions of food and children's clothes mean that even VAT revenues are less than the statisticians would have expected from the GNP that they report to exist.

Now he admits that - in the unlikely event that he will be the Chancellor in the next government - he would have to make cuts in state spending that would be so severe as to make national defence, policing, education and the functioning of both urban and rural local authorities non-viable. But, of course, he does not interpret what he says in those terms; because he has a huge disadvantage. He studied Economics and he still believes in it. So he is taking the country to hell in a handcart; unrestrained by his fellow PPE graduate the Prime Minister.

Meanwhile the financial services industry is also doing its bit to encompass the ruin of the economy. An 'expert' at the normally-excellent advisory firm, Investec [by the name of Rami Myerson: note that well!], suggests that one of the best of British firms should be subjected to asset-stripping. He proposes that Rolls-Royce should either sell off its heavy engine business [that which supplies marine, railway and large tractor engines] to release cash to short-termist money-grubbing shareholders. He may be right to note that many institutional shareholders employ such stupid 'analysts' themselves that they do not recognise the advantages of diversification [by the right management] and just want to own aero-engine shares even if that market is suffering from the European recession and the slower rate of growth in China. Many of them will be equally purblind with him, and fail to see that large companies are better served by having diverse aspects of business. And if he has studied Economics he will probably have succumbed to the idea that investment just 'happens; that it does not need soundly to be planned. He is the sort of twerp who has done much to assist in the deindustrialisation of Britain; and he would doubtless regard it as a feather in cap if he could stimulate a seismic shift for the worse in the national economy and in the micro-economy of Derby where devastating unemployment would follow.

Friday, 28 November 2014

David Cameron has given his long-awaited, much leaked speech on EU immigration to the UK.
He admitted that he was impotent to change the situation within the present EU rules; and the tacit side admission was that he has little chance of achieving any significant change. He has refused to say whether he will advocate a 'No' vote in the event of a referendum on EU membership that offers no substantial change. He has evaded saying what would be the basis for any negotiation of Britain's possible future status within the Union. The pusillanimity of his approach, and the flannelly words in which he tries to clothe his obfuscation, make him look even more painfully inadequate.

Occasional displays of a flaring temper - whether genuine or simulated - do not mark Cameron out as a statesman. Indeed, keeping cool and clinical is the mark of a successful politician who is maturing into a statesman: such as Disraeli, Baldwin and Macmillan.

More importantly, Cameron claims success for the Tories' management of the economy since 2010. He and Gideon are constantly asserting that the British economy is growing more quickly than any other mature post-industrial economy. One set of data, cash turnover of the economy as guessed by the official statisticians, is logged as the GNP - Gross National Product - and the latest three-month results have recently been published. The recorded consumption per head of the population is increasing; on average, with most descendants of the former working class receiving less than average pay. An increasing amount of individuals' spending is on imports [up 1.4% over the quarter] while exports declined over the three-month period by 0.4%. Investment is weak [around half of one per cent]. The claims of economic success are flannel: as are pretences that the government has come even one metaphorical inch to meeting its promise eradicate the budgetary deficit by May next year.

There is a good chance that the universal failure of the coalition to meet either the participants' 2010 election promises or the terms of the Coalition Agreement will help to ensure mass abstention in the general election, mitigated by a rising cohort of UKIP voters. Chaos beckons!

Wednesday, 26 November 2014

Cowardly Clegg was seen yesterday running down to road in the wake of the latest shabby bandwagon bleating that he, too, supported the capping of benefits for EU immigrants.

He is deep into his own dilemma: a former full-time eurorat, he has always declared himself strongly in favour of the UK remaining in the EU. He must be aware that the dominant power in the Union, Germany, will never agree to dilute the principle of free movement of labour. So he knows that he is supporting a plea for the impossible in his latest desperate search for a popular cause.

IF Cameron wins the coming election - which looks unlikely - the continentals' refusal to accept any serious dilution of the principle of free migration within the EU will be a strong element in the disagreement that will underlie the promised referendum on Britain's continuing membership.

The deeper question remains unasked. Recent EU immigrants are well over 80% economically active, contributing vigorously to the UK economy. It is reported that fewer than 40% of the adult population [under age 65] of Bengali origin are economically active: does Clegg intend that the 60% who have made no overt contribution to the economy should also be denied benefits? If not, why not?

Saturday, 22 November 2014

Cowardy Custard Clegg was reported in today's Times to have gone to ground, unable to make any response to the humiliation of the LibDem candidate in the Rochester and Strood by-election. The LibDems have been in cahoots with Cameron's Tories for the best part of five years: and nobody is grateful for those policy modifications that the LibDems claim to have influenced.

One of Clegg's legacies for the next parliament is the gross over-representation of Scotland in the House of Commons. The Tories were prepared to tackle this, but after Clegg's idiotic proposals for the House of Lords were necessarily abandoned he played dog-in-the-manger on reform of the Commons. Hence the odds are becoming heavily stacked in favour of the ScotNats becoming a bigger faction in the Commons than any LibDems who may secure an election success in May next. This will be a significant contribution to the ungovernability of the Kingdom, going forward.

Meanwhile Gideon Osborne has abandoned his 'campaign' to insert some sense into the EU policy on bankers' pay. He played by the EU rules - a worrying indication of how little Cameron will be able to achieve in any 'renegotiation' of Britain's submission to the Union - and was rapped on the knuckles for his impertinence. It is agonisingly apparent that the continentals fail to comprehend the international financial business, and that they have made the rules on the squidgy foundation of complete ignorance. They say "you can pay bankers as much salary as you may choose; but can only give them a maximum bonus of 100% of salary". The fact that 'bankers' have in many cases been paid a commission for turnover under the nomenclature of a 'bonus' has passed the stiff-necked boneheads by. The adventurous areas of the business will wander off from London [where most of them were created] to New York, Singapore, Hong Kong and [soon] Shanghai and Bombay; and the traders and algorithm-creators will go too. Britain's balance of payments, and the income-tax take, and the VAT on luxury purchases will all be lost to the UK. This process will inexorably be in train even before Cameron MIGHT have a chance of starting a re-negotiation IF he is able to form a government.

Disaster looms: and Cameron's repeated declarations that only a government led by him can give the UK a new relationship with 'Europe' ring more hollowly at every repetition.

Sunday, 16 November 2014

In 1938 there was a huge row in Europe centred on the 'territorial integrity' of the cobbled-together entity called Czechoslovakia. Edward Benes, the 'jackal of Versailles' had conned the gullible Woodrow Wilson into handing to a clique of Czech nationalists more than 4 million German Bohemians, 2.5 million Slovaks, about 500,000 Hungarians, 500,000 Ruthenians and 500,000 Zigani [Gypsies, or Roma].

The great majority of the Germans wanted to be ruled by a German-speaking government, and when Hitler made a ploy for their transfer to Germany - and local leaders mostly accepted that - Neville Chamberlain and his French opposite number did not see that they had much ground to oppose this, as a pretty clear language frontier existed within the old Kingdom of Bohemia. As Brussels is now, Prague was a linguistic 'island' in a predominantly Czech-speaking area, but the rest of the German population was effectively contiguous with Germany and Austria [which Hitler was in the process of annexing, with overwhelming popular support]. Unfortunately, Hitler went beyond the bound of what was reasonable, when he made similar demands of Poland: and World War II began. The tragic outcome does not make the revision of frontiers that was agreed in Munich in 1938 wrong: with almost anyone but Hitler, it was a just and sensible outcome. Retrospective opponents of the Munich Agreement say that it destroyed the 'territorial integrity' of Benes's empire.

Now we have a similar issue in the Ukraine. The internal borders between the Soviet Republics were sketched arbitrarily under Stalin [first as Commissar for Nationalities, and then as 'the Boss'], and subsequently Khrushchev casually handed Crimea to his native 'country' of Ukraine. Despite his early title, Stalin did not give a damn for the sensitivities of nationalities, and in East Ukraine and the Crimea were significant Russophone majorities. When there was a coup in Kiev, unseating a formally elected government, some members of the Assembly made ridiculous and offensive statements about forcing Russian speakers to learn Ukrainian and change their orientation: if necessary, by coercion. That was never proclaimed as policy by the Ukrainian state, but it was popular in the west of the country. So with Russian help the most threatened regions declared their independence from the Ukrainian government: while both ministers and Assembly members in Kiev spoke with different emphasis to and about the Russophone population.

Now naïve western leaders, misinformed by the Munich revisionists in their foreign offices, are burbling on about maintaining "the territorial integrity of Ukraine": and threaten to disrupt the growth of all European economies by imposing sanctions against Russia [which does not directly control the 'rebels' in Donetsk and other areas]. This is daft and destructive.

The Sudeten-German question was 'solved' by Benes - restored to power by the victorious wartime allies - by the expulsion from their homes and livelihoods of more than three million German speakers. Having got rid of them, his regime was then shoved aside by the Moscow-dominated communists and for forty-five years Benes' territory was a Soviet puppet: then the Slovaks broke away. The question of the Hungarian minority in Slovakia remains raw.

The Russophone-Ukrainian issue will not be solved by sanctions, or by war: only by honest and well-informed negotiation.

Thursday, 13 November 2014

One must have some sympathy for Ed Milliband, but this rarely extends to being willing to entrust leadership of the country to him. There is very little sympathy vote in general elections.

Yesterday young Ed had his tenth attempt at a relaunch of his leadership; and this time what he said was seriously scary. He suggested that all employers should be made to pay a raised minimum wage, and should eradicate 'zero-hours' contracts: this would throw millions into unemployment. In addition he suggested that 'the richest' members of society should be even more heavily taxed than they now are, and partially excused this by asserting that an unspecified proportion of these 'rich' currently pay no taxes. The sublime silliness of this proposition vindicates all but the most personal and vitriolic attacks that are made on the sinking man. The great majority of British residents who are rich pay their taxes. Some people, within the rules, receive income from UK sources in other domiciles [or have alien-domiciled wives or husbands who receive the bulk of their incomes] which is within the existing rules. There is a strong possibility that many of that minority of the rich will decamp themselves to foreign domiciles and stop paying rates and the taxes on all their personal purchases in the UK if the basic rules of residency are changed: so tax revenues would go down, not up.

He plans a scenario where entrepreneurs will feel even more unwelcome and join the rush to alien domiciles; while the millions of extra unemployed become a charge on the state [adding to the cost of the benefits and allowances they already receive while notionally in zero-hours employment]. After a short time it will be impossible for the government to borrow the increased mass of money they will need to keep paying benefits. The meltdown of society would only be a step away.

To appeal, as the appalling Blair used to do, to the innate good qualities of the British people is nonsense in a country that has been made a patchwork of 'communities', some of whom are already 65+% 'economically inactive'. There will be no fall-back for the government: even if we remain in the EU our standoff from the eurozone severely limits the help the members would be able or willing to provide to assist the UK. The USA is in no mood to re-run Marshall Aid for a feckless island near Europe that has no contemporary strategic significance.

Friday, 7 November 2014

There is some hope that the LibDems will be wiped out in the forthcoming General Election; but it cannot be replied upon as the possible outomes cover a wide range.

Thus two related items of today's news come together scarily. One is the suggestion that the surviving LibDem MPs will demand as part of their terms for entering into any coalition that they have complete control of a list of Departments of State. One of those departments is Energy and Climate Change - which has a LibDem incumbent now. Yesterday the Secretary of State, Ed Davey, said that the average subsidy that households will have to pay for 'green' energy programmes [plus a small amount to subsidise social tariffs] will rise from £27 per household now to £58 in 2020. One can expect that the actual sum will be more; and that this will not be matched by any real increase in average household incomes. So standards of living will be driven down to pursue those policies, if the Libdems have a say in this.

When Labour was last in power, Ed Milliband [now the leader] was the Secretary of State for Energy and Climate Change and he set many of the policies which the coalition have pursued by default. So we can not hope for much change out of him. Tories hint that they will somehow mitigate the impact, if they have any share of power; but the credibility of all Tory policies on matters economic is stretched to breaking point.

The absence of coherent economic and social policies right across the narrow spectrum of Britain politics is frightening.

Wednesday, 5 November 2014

Cameron of the Bullingdon Club has been peddling his spiffing idea for a few weeks now. If you focus the national concern about immigration on the number of EU migrants, you may divert the attention of the nation from the reality that they all know; but do not wish to accept that they know. By placing the argument on completely false ground the Prime Minister has sown a wind that will soon return as a whirlwind.

The facts are that at least 80% of recent European immigrants are in work; while 67% of the adults of Pakistani 'heritage' and 69.5% of those from Bengali 'heritage' are economically INACTIVE; i.e. they are not in employment. The amount of taxes that those people pay, as a ratio of the benefits and state services they receive, is negligible.

Will the politicians please explain how this has happened? Do they think anything should be done about it? Can anything be done?

Sunday, 2 November 2014

The UK had its warmest-ever recorded temperature on October 31 - All Hallows Eve [Hallowe'en] - and on cue the UN 'experts' on Climate Change are about to deliver their newest and most extreme warning about climate change on the earth. They are set to say that unless the population of the planet is taxed with higher energy prices, and higher taxes to subsidise energy costs [and thus try to con people that they are not paying as much for energy as they will be compelled to do] climate change generated by humans will become irreversible.

All that the scientific experts need to do is write the declaration. They leave it to despised ragbag politicians - acting on the advice of discredited economists - to enforce their prescription on the people. Welcome to the future! Welcome to the reversal of economic growth in China, India and Africa!

Spend an hour looking at the fascinating data on climate change on earth, and on other planets, that are plentifully available on the Web. And then see how how much convinced you are personally that these scientists have got the correct analysis. One does not need to consider the personal integrity of commitment of the scientists: they are in the position of anyone who has been elevated to the role of Advisor to a ruler among men and women. Proximity to power always goes to the heads of intellectuals; but it does not confer authority on them. It may foster the formation and extension of delusions.

Tuesday, 28 October 2014

Gideon Osborne thinks that he is very clever; and even he is impressed by his cleverness in orchestrating the announcement that many tens of billions of pounds are to be invested in infrastructure projects in the UK.

It was a principle of Political Economy that the primary function of an economy is to maintain its people to the highest possible level of comfort; and that this could only be assured in the future if enough of the national product was invested today. The principal reason why Political Economy was known as the 'dismal science' was because of its insistence on setting aside at least what was necessary for investment. That was an overriding constraint on consumption.

Gideon thinks he has pulled off the ultimate defiance of Political Economy, by continuing with growing payments for civil servants and beneficiaries of the welfare state. Normally this would mean that the infrastructure continued to decline and become more out-of-date. But the great genius is getting foreigners - and the Chinese in particular - to put just a little of their accumulated trade surplus into British railways and other essential systems.

The British users will have to pay the alien owners for the use of those services in perpetuity: the cash will syphon out of the country after direct costs have been met within the UK. The profit - which should be available for re-investment, had the projects been British-owned - will be allocable by the Chinese to whatever investments they deem appropriate, wherever in the world these occur. Given the balance of the British economy, this is likely to be a permanent situation.

Monday, 27 October 2014

The programme was concerned both with the man's character - obviously impeccable - and a widespread concern about large numbers of NON-EUROPEAN immigrants who are increasingly disinclined to assimilate to the British Democratic way of life. No concern at all was expressed about a 'flood' of EU migrants 'swamping' towns in the UK.

Politicians of all parties appear to be desperately anxious to focus on the NUMBER of European migrants; and to pretend that this numerical issue - and not the formation of ghettoes by determined aliens - is the matter of concern that voters place high on their list of concerns.

We have been shown with dramatic clarity that local government and the police concealed appalling crimes in order to avoid being seen as 'racist' or risking undermining 'multiculturalism'. The silence from the front benches of both houses of parliament on this deep issue is remarkable. Unless it is addressed properly and frankly, it will eventually explode.

Sunday, 26 October 2014

Gideon Osborne has been running around all year bragging about Britain's spectacular [relative] economic growth rate. This is contrasted especially with rates of growth in the EU, and even more specifically with the countries in the eurozone. Cameron has not been far behind in his boasting on the same point.

Now that this is transferred into a recalculation of the bill to be compliant with the obligation to contribute pro rata to the costs of the EU, the British government wants to deny that their country's economic performance justifies a bigger bill. This is an example of seriously shabby politics.

But there is an even more worrying aspect to this situation. If Cameron thinks that by putting on a fake show of anger he will impress anybody, he is sorely deceived; but if he genuinely was as angry as he seemed to be during the past week that is truly alarming. A man with such infantile tantrums should not be allowed to drive a car, let alone conduct the affairs of a great country. Over the past 300 years virtually all the powers of the Crown have come to be exercised by the prime minister, along with several new powers that never resided in the monarch. Such an aggregation of power can only safely be managed with modesty and calm deliberation: it would appear that Cameron has shown himself quite unfit for office.

Friday, 24 October 2014

In a brief soundbite this morning, Nigel Farrage said it all. David Cameron has absolutely no discretion about paying the new sum of contribution demanded by the EU from the UK. Cameron's Tory predecessors Heath, Thatcher and Major took Britain deeper and deeper into the Union: this is only a Tory achievement. The country is in the club. The rules are the rules. Nine countries have had bill increases; nineteen have had rebates; each country has one vote: so the logic is inescapable.

Where does this calculation come from? From the Commission, acting on the basis of economic statistics. Prostitution, drugs trading and some other illicit activities are now counted in national income figures, so Britain's officially-recorded turnover has been inflated - and this is counted back to 1995. In most years between 1995 to 2008 Britain was booming, relative to many European countries; and in the past two years recorded growth has exceeded other EU countries. When all the data are aggregated, Britain is credited with greater economic turnover than was formerly recognised; while other countries' results are scaled down: the arithmetic is unassailable, given the parameters within which it is computed.

Cameron can only make a bigger fool of himself by continuing the anger game that is already a national embarrassment.

This incident demonstrates Britain's impotence very clearly. The chances of pulling the country out of the EU without massive economic and constitutional damage are nil. Cameron's re-negotiation is most unlikely to happen, because his chance of gaining power in the next General Election is diminishing daily. But if it did happen, it could not make any significant changes to Britain's role or status in the Union: while the risks attendant on departure from the Union would starkly be revealed.

I was an active member of the GET BRITAIN OUT campaign in the one referendum we have had. I loathe the bureaucracy and the interventionism of Brussels, and the passage of so much unnecessary legislation cast in alien legal forms. I desperately wish that we were an Associate, and not a Member of the Union: but that is pipedreaming. We are in, up to our collective neck; and there is no easy way out.

Friday, 17 October 2014

The Chief Constable of Greater Manchester has rightly been pilloried this week for admitting that his force has been inadequate in persuing cases of abuse and rape of children by gangs, mostly composed of ethnic-minority men.

One part of his interview that has generally been ignored by the press has been his suggestion that the way the courts are managed means that it is extremely difficult to get convictions. The young people who have been victimised are unsophisticated and largely inarticulate; so defending Counsel have scant difficulty is demolishing their evidence.

But that is surely the greater offence. The adversarial court system works diirectly against the weak. The Bar - supposedly one of the greatest professions - is at its raw edge a vicious racket. Judges, almost all of whom are drawn from the ranks of Barristers, are tolerant of behaviour by their colleagues that amounts to a denial of justice to the victims of abuse.

All the great talk about the 'glory' of English [and Welsh] Justice is fundamentally false. As long as the self-opinionated great men [and women] of the profession fail to recognise quite how disgraceful is the habitual conduct of some of their colleagues they will not earn the respect of their fellow citizens. Charles Dickens recognised the fundamental rottenness of the judical system almost two centuries ago: and nothing has improved since then.

Tuesday, 14 October 2014

Yesterday it was confirmed that the UK government hoped to get around £300 million from a sale of its 40% stake in Eurostar. The money is supposedly being used to 'reduce the deficit' [presumably they actually mean the state's accumulated debt] - which was increased by billions just a few months ago when the EU insisted that Network Rail's debt should be added to the national aggregate. It is now likely that either in the immediate future, or a few years down the line, the whole ownership of the cross-channel link will pass into foreign hands. That doesn't seem to worry the government, which has allowed alien takeovers of British brands in the food and drink sectors worth over £4 billion in the past year alone. The fact that British buyers of the affected brands will be paying toll to aliens in perpetuity is of no consideration.

Today it is announced that people over 55 years of age will be able to draw from their accumulated 'pension pots' as often as they like, to whatever extent they like, provided they pay their marginal rate of income tax on 75% of what they draw. No doubt the unstated objective is to encourage people to draw down - and spend - some money between now and the election in May next year, and thus inflate the fake boom that is being engineered. As most 'pension pots' are too small to provide a decent supplement to the state old-age pension if they are held in reserve until retirement [the date for which is being pushed back] the probability that future pensioners will be abjectly dependent on the state pension and the benefits system is increased.

Government policy continues blindly to denude the economy of resources which could - under decent management - improve the future prospects of the nation.

Saturday, 11 October 2014

It is now permissible in the UK to become engaged in a debate as to whether the mass migration of mostly-young, willing workers from the EU has reduced both the job prospects and the wages of native British workers.

The other immigration issue remains one for whispered conversations and low-keen chatter in pubs. This is the issue of non-white immigration, and within that the particular situation of the benefits system. There is a suggestion that the people who issue benefits share with the South Yorkkshire Police - and many other forces - a paranoia of being classified as 'racist'. Hence it is understood that in many towns and cities first, second and even third generation benefit dependents are able to make their claims and receive payments all in their alien native language: the public administration system is said to be franchised out to the immigrant community; with a licence to be less rigourous in assessing claims than are those dealing with native white Britons.

Furthermore, it is a matter of observation that many urban MPs - most of them Labour - spend a huge amount of their surgery time and administrative effort on non-EU immigration cases.

This is all alienating the descendents of the former working class. They are no longer vote fodder for the Labour machine. It is impossible to assess where this will go: but there is a risk that Labour could become the party of non-white minorities.

For most of those alienated people, voting Tory is impossible. The Thatcherite destruction of industries and of employment, combined with policies seen as largely antisocial, have created a spectral vision of the Tories that would take several more generations to remove. David Cameron's accent - combined with Gideon's sneer - maintains the barrier.

Clegg has shot the credibility of his party to pieces. The greens offer declining living standards and unaffordable electricity.

Nobody knows what UKIP offer: they have no economic policy to speak of. But they do offer a vote on the EU; and they do not totally avoid talking about immigration. That is enough to made them 'different': better, perhaps, than the establishment devils that you do know have let you down.

Friday, 10 October 2014

Labour has held the parliamentary seat of Heywood & Middleton, located historically in Lancashire.
I grew up in Lancashire, in the last days of powerful working-class protestant Toryisn. The Borough of Darwen, before its incorporation into Blackburn, was pretty solidly Tory because it was working class and protestant. Nobody works as hard, or as repetitiously, now as the majority of men and women did only fifty years ago. Darwen parish registers show whole pages of marriages between men who are described as 'Collier' and women who are either 'Weaver' or 'Spinner' [to differentiate workers in spinning mills from soft southern non-employed women who could be decribed as 'Spinsters'. The working class that I knew has effectively been abolished. Similarly the identification of more than 80% of the population as affilliates of this or that chrch or chapel is absolutely a thing of the past, with Muslims the largest active religious group.

From the 1950 General Election until now the slowly-declining Tory party competed with Labour - which first emerged as a credible party of government only in 1945 - to bribe the electorate with competing packages of handouts. Thus the two parties divided office between themselves over the years: until the stalemate that resulted from the General Election of 2010,

Since 2010 the awfulness of both 'major' parties [and the unspeakable shuffling of the LibDems] brought disillusion with politics to a new peak. Labour and Conservatives are both planning to run their next election campaign on the basis of what they can give away; mitigated by scarcely-credible 'plans' to pay for the handouts. The phenomenon of 'economic growth' means an increase in total spending in the economy: Osborne has achieved the fastest growth in the developed world simply by increasing government spending and borrowing, and mainintaining conditions in which people individually borrow ever more [both for house purchases and lifestyle spending]. To compound those follies the balance-of-payments remain seriously in deficit, adding external debt to the burden that has fallen on the state.

If a vote for 'none of the above' could make a significant difference to politics, people would take it. Now it looks as if UKIP is better than nothing. But they are not just attracting protest votes: they are tapping again the deep roots of working-class conservatism, and also at the roots of pristine Disraelian conservatism. The cross-party politician Winston Churchill was anything but a Little Englander: he offered union to France in 1940, and looked forward to a European Union. But the true blue Tory would have nothing of Catholic Socialist Europe, and Old Labour were nationalists [as Foreign Secretary in the Attlee government, Earnest Bevin described himself as " friend of the jolly old Empire"]. Ukip much better meets these two traditions than any other party; and its leader's habits chime in wiith both old working-class and true tory behaviour.

The clever spin doctors and professional politicians still think in terms of swing between two establishment parties, with decision being taken on the Manifestos on the basis of handing different packs of goodies to the despised, alien hoi-polloi. Ukip meets a historical trend, which could overwhelm the entire system; just seven months from now.

Thursday, 9 October 2014

Britain's retiring EU Commissioner, Baroness Ashton, has been toe-curlingly embarrassing. The new appointee is a symbol of the arrogance of the political class: a Tory lobbyist who was shunted into the overblown House of Lords has been confirmed as the partial head of Financial Services for the EU for the next quinquennium. The Commission would not trust any Briton with the whole job, so the function has been split into two non-jobs; and the EU Parliament has bought into that.

Now the Europeans are busily saying that the financial services must be spread around Europe, to the detriment of London. This completely ignores the basic truth that London is - and has been for at least 250 years - a totally different sort of marketplace in financial services from those in Paris, Vienna and Rome.

This is exemplified most clearly in the insurance market. Both Lloyds and the London-market companies accept business from all over the world. They will price emergent risks of which there is no quantifiable history on the basis of well-honed judgement of a quality that has never been equalled anywhere else: and they are almost always right. There are, from time to time and rarely, egregious mistakes made. The biggest recent one was in a London office of AIG [formerly the greatest of American Insurers] when they accepted hundreds of billions of dollarsworth of bankers' risk against a new form of contract that was untested: and it brought down the whole company, which was then 'rescued' by the US government because the collapse of the American International Group would have made the US economy unsustainable.

Only London can manage such risks, and only in London is there a subscription system whereby most new and many well-known risks are only accepted by the Market on the basis that the risk is carried on the balance sheets of a consortium of experienced, intelligent underwriters who all have to agree before the contract can be completed. If the contracts that AIG concentrated on its own balance sheet had been offered to the subscription system, they would never have been accepted. It would be lunatic to think that a subscription market could be created involving underwriters in twenty-six financial capitals. Smashing London's 'monopoly' would not spread the market around Europe: it would just deprive the world of a market that has been developing and adapting to change [and increasing its access to capital] since 1670.

The same truth applies to the innovative areas of finance that are misguidedly called 'banking' [or damned as 'casino banking']. Derivatives, in particular, have been developed in London and New York - and copied worldwide - because they are very useful, and they work. Managing such contracts, and developing new variants, is a London speciality. It earns good wages and bonuses for the experts who work in the market, profits for the companies that finance them, and taxes for the British government. There are no losers: but envious Europeans feel that they are deprived of a 'fair share' of the business. The business is open to them: they can just enter the London Market [and some have done so]. But many continentals want the protection of their own governments, their own central banks and their own regulators; they want to play by rules that do not permit the innovation that is common in London. The big rewards come from carefully-calculated expert risk-taking, which is available only in London and [now to a lesser extent, due to regulatory changes since the crunch] in New York.

Derivatives have not failed: it was bad old-fashioned moneylending, especially on property, that brought down banks in 2007-9. This simple fact creates furious jealousy in non-London financial services as regulatory screws are tightened and the prospects of profitability are reduced. The EU has power to kill London's unique capability. It cannot be spread around: it is the very fact of concentration in the single market place that gives it that combination of strength and flexibility that the cretins want to tear apart. The wet, half-comprehending political caste state - but understate - this problem. The threat is urgent. It is a national issue. We need a popular campaign to save London - now!

Monday, 6 October 2014

Trust Boris to pick up a sensible idea and run with it! He is about the best publicist in the country, but his image as a Bullingdon Buffoon mitigates his effectiveness very significantly. Hence his piece in today's Daily Telegraph may have less of a positive impact that it should. One advantage of his publishing it today is that it provides a sensible alternative to the wishful fancies of the Libdems in Glasgow.

The idea is that which the late Barbara Castle believed had been implemented by the 1945 Labour Government; and thereafter betrayed by governments of all parties. This was the idea that National Insurance pensions contributions would be accrued by the government in a massive fund that could be used to finance the development of the economy: and the profits of that investment would amply fund the pensions to which the insureds became eligible in old age. As I mentioned last week, the National Health Service was so well-used from day one that that the fund was quickly exhausted and had to be topped up from general taxation to keep healthcare solvent; pensions continued to be paid out of taxes. In old age, Barbara continued to lament this despoliation; and to argue that the British people had been robbed.

Boris's idea of the day is that pension contributions, at least those of the higher-paid who do not fall within the new state scheme, could go into a Grand National Consolidated Investment Fund [not his terminology] that would develop the infrastructure that has been listed by Gideon Osborne but not significantly addressed, which would produce returns from which future pensions could be paid. Good idea!

But politicians cannot be trusted any more now that in the nineteen-fifties, sixties, seventies, eighties or nineties: most people would say that present crop are even less trustworthy that the likes of Sunny Jim Callaghan, Enoch Powell and Grocer Heath [all of whom had very creditable service records in World War II]. What chance would there be of the Fund being allowed to fructify under proper management? Who would be the managers? Assuming that the Treasury would have a final say on the job-specs, the people-specs and the individual 'suitability' assessment of nominees, what chance is there of effective and independent Trustees being appointed? And, above all, what chance would there be of the Fund not being raided by a hard-up government?

I suggested in a recent blog that people should be issued with free bonds in lieu of the tax cuts that the country certainly can not afford at this time, allowing that money to be directed by the government into productive investments. Those investments could yield profits that could enable pay-outs to be made to the bondholders; following the principle of post-war credits that were issued during World War II [but not properly honoured, later]. But, of course, the Curse of Castle could apply to such a Fund - just as I suggest above would occur with Boris's Grand National Consolidated Investment Fund.

There must be a way of appointing managers who would be competent, honest and genuinely independent of government: I must put my best thinking-cap on!

Saturday, 4 October 2014

Even before their conference begins, the Liberal Democrats have begun to set out spending plans in excess of the present level of state overspending. So now all the 'conventional' parties have demonstrated that they have learned nothing from the nation's experience over two generations.

The Guardian - which the BBC always calls "The Guardian Newspaper" to assert the pinko delusion that it is capable of objectivity - has already declared that although there is a general view among the electorate that the Lib-Dems face wipe-out in the coming General Election the nation really needs this parcel of deluded verbalisers as an integral part of political life.

In order to get a whif of office, they ditched their solemnly signed promise on student fees; and thereby alienated a generation of potential supporters. Then in office they have achieved nothing of significance: and a lot to foster the general disillusion with politics and politicians:-
* Clegg produced a proposal to reform the House of Lords that was so sublimely silly that it was killed quickly; thus ensuring that the hereditary peers will survive into the next Parliament and that small rotten boroughs - especially in Scotland - will continue to be over-represented in the Commons.
* Cable - the one star in the party - has said a lot of good things and achieved spectacularly little at the dear old Board of Trade.
* Hughes stayed out of office until the very last moment, when he recognised that he'd never be a minister unless he joined in; then he became a totally conventional law officer.
* Alexander served as a loyal number two to Gideon Osborne: enough said!
* The other one to head a major ministry, the Energy Secretary whose name and picture remain unknown to the general population, managed to avoid the major investment that was needed to compensate for the over-hasty commitment of the Blair-Brown governments to shut down coal-fired power stations. From the depths of recession until the development of the looming public-spending squeeze he piled agony on consumers - now and in future generations - by taxing energy supplies with generous subsidies to the operators of inefficient and unnecessary windmills.

The Liberal Democrats deserve what is coming to them in the election: it will give the depressed voters the one thing that they can gloat about!

Thursday, 2 October 2014

Next week the Liberal Democrat Conference will be reported extensively in the Guardian and given polite but cynical coverage from most of the rest of the British media; but now that the Tories have gone back to work the putative electoral promises made by the major parties are clear.

They are deeply depressing. They represent mainstream politics as it has dragged down Britain since the 1951 election. The parties are competing to offer different kinds of handout to those who they reckon are most likely to vote for them.

Yesterday the Tories specifically promised £7 billion of tax cuts which are obviously unfunded, and it is difficult to believe that the national budget can afford the additional spending that they promise to make on the National Health Service. These additions to the 'spending' side of the national finances sit alongside the Chancellor of the Exchequer's implicit promise to cut public spending across the board by another £30 billion. It is not at all clear what public services can be maintained, even in an exiguous form, after such a savage pruning. Public life and social services can only become more nasty and brutish under such a regime: and the preordained failure of the nonsense about the 'big society' means that the Tories can not pretend in the next election that voluntary social action can compensate for the withdrawal of public services.

Labour has done no better: they too talk about reducing the government's annual overspend while promising that both the state [insofar as it will continue to be an employer and a donor of benefits] and private employers will have to pay their staff more with no hint that their productivity will be increased. If productivity genuinely increases in line with pay awards, there will be fewer jobs available from a given fund in the employer's budget: unemployment must increase.

Whoever wins the 2015 election will be the real loser. The economy has not got the resilience to afford the handouts promised by either leading party. The deficit will grow and the creditworthiness of the country will decline [whether in or out of the EU] so the terms on which the government can borrow will become punitive; with the consequence that enforced spending cuts will be massive and arbitrary.

Can nothing be done?

Not by the present crop of politicians working within their current context and mindset.

If politics could change, how should policy change?

The country should follow German experience, and create a Grand Coalition of the major parties, Instead of cash giveaways to individuals the government should give the people who work bonds in a National Development Fund, to become negotiable when the economy has been recalibrated. This would be a development of the Post-War Credits that were issued to people during the Second World War. The allocation of bonds should broadly reflect the individual's input of effort to the implementation of the National Plan. Billions of poundsworth of housing and infrastructure projects can be 'shovel ready' within weeks: while thousands of entrepreneurial businesses can be enabled to access capital to fund their growth. All that is needed are the wit and the will to do these things.

Saturday, 27 September 2014

When the British National Health Service was created, in 1948, it immediately spent much more than had been budgetted. This was most obviously because a vast proportion of the population throughout previous history had suffered from appalling dentition; with a huge number of the people who became eligible for NHS dentistry having ill-fitting and ineffective false teeth. Over the next generation, preventive dental care [funded by the NHS] greatly improved the state of the people's teeth; but in 1948-50 the demand for false teeth 'free at the point of need' greatly exceeded what had been allowed for. The equivalent situation existed in the provision of spectacles; millions of people had struggled with poor eyesight and they were now entitled to spectacles, free at the point of need, So the NHS began by overspending, and the intention [expressed through the wartime Beveridge Report] that both the NHS and pensions would be funded by the National Insurance Fund to which all employed people would contribute proved to be inoperable.

Instead of building up a surplus while future pensioners were net contributors, as had been expected, the NHS took up the whole income to the Fund, and the NHS expenditure budget had to be topped up from general taxation: and so it has remained. National Insurance is now simply a second income tax that goes into the national budget, from which the NHS costs, and state old-age pensions - and social care for the elderly and necessitous - have to be paid. The costs of this complex of social provision [inflated also by other other payments of benefits] have meant that the trumpetted policy of Gideon Osborne to 'eliminate the deficit' on government spending has become a very sour joke. Under the 2010 coalition government there may have been a modest reduction in the rate at which the deficit is increasing, but even that is dubious. Government statistics are constantly being found to be outdated, for example as the result of EU rulings that the debt of Network Rail must be added to the public debt total, and the earnings of prostitutes must be guesstimated and entered into the National Income figures.

And now comes the limited military action in Iraq - not yet in Syria - against the so-called Islamic State terror machine. This is bound to be costly: an estimate of £3 billion for this year has appeared in some newspapers. This is notionally to be debited against the government's fabled 'contingency fund'; but this is not a piggy-bank, such as the National Insurance Fund was meant to be. Each government making a budget for any year guesses how much revenue will come in to the state's coffers, and how much expenditure is anticipated; and an addition flow of cash is assumed to be available for any overspend in the period. The deficit will inevitably increase as the hundreds of millions are called upon to pay for the fuelling and equipment even of a few Tornado aircraft. David Cameron predicts that this war will continue for years; but the Tornados are due to be phased out, and the much-delayed replacement Typhoons have not been designed with a capability to replace the Tornados. So to prosecute the campaign against Isis the Tornados have to be kept operational, at ever-increasing cost. Again the short-sighted cheeseparing of politicians has ended in greater cost than was envisaged. It always happens!

Wednesday, 24 September 2014

The Labour Party Conference, even more than the other parties' conferences, is a ritual event where the tribes can come together and pretend that the erosion of their collective power - which has been going on since Harold Wilson's time [or earlier] - does not matter. Thus it is a feast of fatuity.

Traditionally the Leader's Speech has been a central feature of the event, and duly the Scribes and Pharisees of the movement [the journalists and political analysts] have to pretend that they consider it important. This year they have been made to appear more ridiculous than usual because The Leader 'forgot' to mention both the economy and immigration in his speech. He did remember, fatuously, to emphasise the word 'together' more than fifty times; which can be interpreted to mean that he expects the party to succumb to its ancient fissiparous tendency as the election looms closer.

His own painful inadequacy for any position of leadership was highlighted by the entire, hour-long performance. Party aparatchiks have tried to mitigate the situation by saying that Bully Balls did cover the economic issue adequately in his speech on Monday. He said a few things of marginal relevance. But the sum total of the Leader's and the Shadow Chancellor's offerings is to show that they have no formula for eradicating the deficit on state spending, or the deficit on the balance of payments, or substantively funding the National Health Service to meet the aspirations set out by Aneurin Bevan in 1947.

In the coming weeks we will see the fandango of fantasy at the Lib-Dem Conference, which a few Grauniadista lovies will ensure becomes over-reported. And we will see the stage-managed pretence of unity and loyalty at the Tory Party Conference.

The sum total of these events will be to emphasise the uselessness of the political class, the vacuity of their supporters and the sycophantic irrelevance of most of the media .... and the country will continue to sink in the ocean of economic failure.

Tuesday, 23 September 2014

Tesco has a new Chief Executive. It is notorious that new CEOs try to pile bad news onto their predecessors, and to make sacrificial victims of the close associates of the former CEO.

It appears that this case cannot be dismissed as another example of that syndrome.

There has been puzzlement at the fact that Tesco has been delivering reasonable profits, despite their suffering from a very costly mistake in America and losing market share in their UK base business. This has coincided in time with a significant recession in the European countries where they have become entrenched.

The picture that is emerging is of a massive acreage of shop space, and a costly on-line operation, run by a bureaucracy with a low-paid and dispirited mass workforce.

Meanwhile customers have become more conscious of what gives them value for their scarce money. Instead of going routinely to one store for a weekly [or monthly] 'big shop', there is much greater selectivity in customer behaviour.

The comparison of price with perceived value remains important: simply offering the cheapest goods with 'no frills' and minimalist quality control has only limited attractiveness. While price advantage attracts customers to new outlets, the slow realisation that the range of goods is modest, and the availability of many items in stores is intermittent, causes disillusion. The more quickly they grow, the more customers will go through a cycle of welcoming, doubting and dismissing the super-cheap outlets.

The stores with bigger ranges and more-assured quality will recover their competitive power; especially while the delusion of macroeconomic recovery prevails. But as the competition between John Lewis/Waitrose, Morrisons, M&S, Sainsbury's, the Co-op, Tesco and local markets reveals significant excess capacity. The role of charismatic business leaders will return to central importance: and the ability of such leaders to identify and empower adequate close supporters will be a decisive factor in their success or failure.

Retail is going to become much more exciting in the next couple of years: and for some of the biggest businesses it is a question of survival.

Saturday, 20 September 2014

So, the party leaders say they agree - in principle - to more devolution of power in the UK; though Labour will fight to retain their rotten-borough parliamentary seats in Scotland.
They would all spend more money on this exercise; and they will also talk about giving powers to support economic growth in the regions. But there will be no serious plan, no measures that will actually enable people to make the economy grow in the only way that matters: in material production and in generating intellectual property that can be sold to the rest of the world.

Britain is well down a slippery slope, and this diversionary politics can only further deprive the country of the will and the ability to take the measures that are needed to reverse two generations of severe economic decline.

Friday, 19 September 2014

Only four significant local authority areas had a YES vote in the Scottish Referendum. These were the once-great industrial cities of Dundee and Glasgow, and Glasgow's immeduate neighbours.

The Thatcherite destruction of the economy in these places in the eighties was matched by the mayhem that Thatcher wrought in West and South Yorkshire, The Northeast, Lancashire and Mwerseyside and the once-Black Country in England: these areas, too, can be expected to show cynical contempt for Westminster politics and politicians whenever they are given a chance to show it.

Although 364 Economists signed a letter to the TIMES deploring Thatcher's Monetarism, the whole profession agreed with the nonsensical pursuit of the 'competition' agenda that has been common to Blair, Brown and Cameron as well as Thatcher. Where the Economists disagreed with Thatcher was with her insistence on modesty in public spsnding; they preferred to believe that 'growth' could be fostered by Keynesian deficit spending. Blair-Brown and Cameron-Osborne practiced deficit spending - it is still going on, backed up by the reckless expansion of the money supply under 'quantitatiove easing' - and thus they have supported an increase in TRANSACTIONS, which is what they see as 'growth'. More people than ever are employed, mostly on extremely modest wages, distributing money and imported commodities around the system. The real economy, to which Dundee, Wolverhampton and Darlington contributed mightily between 1760 and 1960, has continued to decline.

Now the Westminster gang of politicians without life experience plan to spend years on constitutional tinkering; while the economy continues to go down the Suannee and Gidreon Osborne's nasty spending cuts reduce the standard of living for the most vulnerable groups in society. Things in Britain are getting nastier. See my book, Sinking Britain, accessible from this site.

Wednesday, 17 September 2014

An Irish associate assured me yesterday that her countrymen were confidently expecting that a 'silent majority' of Scots would vote NO tomorrow. Financial markets show only slight unease at the prospect of a YES; and one bookie claims already to have made some payments on the assumption of a NO vote.

One issue that still concerns people is that intimidation has been rife already, almost entirely by the YES camp. There are fears that this will continue actually at the polling stations, to which pro-independence parades are anticipated. If that happens, one must hope that the police do not turn a blind eye; as the racially-biased pro-Asian police reputedly did in Tower Hamlets during the recent local election.

The depths of the 'institutional racism' of the South Yorkshire police, exemplified in the child-sex scandal, is probably replicated in thirty towns and cities across England. It has not yet been reported from Scotland, so their force may creditably be clean. Let us hope that they maintain their reputation tomorrow

Monday, 15 September 2014

I have spent a decade in bemusement at the ongoing catastrophe of Ocado. Its borrowings increase, its business model was always daft; but there have constantly been backers.

The model of selling somebody else's product, using a technology that the principals will more slowly and sensitively adopt within their business, can have no long-term happy ending for the outsider. Partially recognising this, Ocado entered into a secondary deal with Morrison's: just as Morrison's nosedived in the face of newly intensive competition.

Now Phones-4-U has been closed down, with a massive loss of jobs - estimated at 10,000 - and they didn't even build their business as agents for a single supplier whose commodities they retailed: they had two suppliers, as Ocado decided to do before the Morrison's debacle.

With yet another new generation of 'phones coming out, competition has intensified and the big primary retailers - represented by Vodafone and EE - have decided that they need all of the slender margin that the patent-holding brandowners allow to them in an increasingly competitive market; so they have had to pull the plug on their secondary channel of distribution. The wipeout of Phones-4-U is a portent, not the end of the process. APPLE have developed their retail showrooms very successfully. CURRIES have merged with a phone distributor to optimise sales per foot of shop floor space. Most people will for the foreseeable future want to hold, feel and see a £400-plus purchase before they buy any selected model: so they will want to see a range of options. Those who are hooked on Apple technology will want only to look at the Apple range, and will easily be enticed to an Apple store. Most other people will want to see a range - maybe including i-products - and so will want a variety retailer.

Retail markets in 'technology' will continue to be built on compromises between the holders of the intellectual property that is the main component in the price of the product and the retailers who enable the public to compare and contrast the devices for themselves; but the paramountcy of the brandowners will in the end always be decisive.

This is NOT the business model that is encapsulated in formal Economic theory.

Wednesday, 10 September 2014

Ofgem has again assured the public that there will be sufficient electrical generation capacity available to ensure that even on the darkest, coldest day of the winter there will be enough supply.This is achieved by giving subsidies to companies to keep power stations that they are not normally allowed to use, so that the capacity can be brought into use. This mothballing is achieved at the expense of the customers. The plant is perfectly viable, and could serve for many more years: but it burns coal and thus is in breach of the laws on emissions control.The otherwise-viable plant represents investment that customers paid for; and the replacement plant will be built only if customers are coerced into paying even higher prices: not only to meet the costs of the plant that is to be built but also to provide a nice cushion of profits for the companies that will have to raise the cash to pay for the construction. Most of the British capacity to build power stations was flogged-off cheap [or just shut down] under the Thatcherite clowns.The larger coal-fired stations with many years of potential future life should be converted NOW to get their heat source from small nuclear power plant of the kind that Rolls-Royce and its partners have put into submarines for generations. This is safe efficient energy and the capability to make it mercifully still exists!Of course, it won't be done because insiders did not think of it: so they will immediately look for 'reasons' why it is "not viable".

Sunday, 7 September 2014

48 hours is a long time in international politics. Among the sub-plots at last week's NATO meeting in South Wales was the until-then-unthinkable possibility that Russia could provide a vital link to the Assad Regime in Iraq. This is seen as the most fruitful potential access route to NATO reaching an 'accommodation' with the Syrian tyrant to enable joint action to be taken against the latest Jihadi threat from Isis, otherwise known as IS and Isol.

In an interview published today [7 September] Henry Kissinger says that action should already have been taken to remove the threat of Isis/Isol/IS; and he joins in the chorus of those who argue that President Obama clearly has no clue of the importance or the urgency of the issue.

This morning's News also carry the unsurprising story that the Ukrainian ceasefire, barely 48 hours in existence, has been breached by both sides in the South of Ukraine. The common feature between the situation in Iraq/Syria and the Ukraine have not yet had the degree of attention that I suggest they deserve. The Presidents of Russia and Ukraine have agreed on the cease-fire; but neither of them has complete control of the forces on the ground. By definition, the 'rebel' fighters are all volunteers and are not under the command of Russian generals. Similarly, the aggressive and extremist Azov Battalion fighters are an irregular volunteer force. So just as Syria faces the problem of multiple anti-Assad forces [the 'official' rebels, Al Qaeda and Isol at least] so there are multiple private armies in the east and south of the Ukraine.

There is a consensus opinion among commentators that provided a large degree of autonomy is given to a Russian-speaking entity within the Ukrainian Republic, and that a consequential caveat is applied on the extent to which Ukraine may enter west European institutions, President Putin's ambitions in the region will be satisfied. Then it falls to the Kiev government to establish discipline over its 'supporters' and to the Moscow government to rein in those whom it has sponsored.

Instead of bellicose and toothless talk about preparedness in the NATO alliance to 'do something' to preserve the 'territorial integrity' of Ukraine, the rhetoric from western chancelleries should be directed to a realistic acceptance of the realities on the ground; offering assistance to both Russia and Ukraine in controlling hotheads while allowing the irregulars to breath fire at each other as a long-term accommodation is negotiated.

Sanctions are hurting Russia: they are also adversely affecting EU dairy prices and exports at a time when strong growth is needed. The common interests of the powers are clear and can successfully be achieved.

Saturday, 6 September 2014

The House of Commons yesterday gave a Second Reading to a Bill that would mitigate the impact of the so-called bedroom tax, During the debate a minister said the cost of the proposed change to the state would be £1 billion annually, and others - Conservatives - suggested that this would militate against the government's plan for 'economic recovery'.

The programme of 'cuts' that has been pursued for four years has failed to eradicate the deficit on state spending, and done nothing to reduce the accumulated [and accumulating] national debt. But it has succeeded in reducing the quality of life very broadly accross the country, as well as reducing the military budget to a degree that endangers to country.

In the last few days it has been revealed by the Inspectorate of Constabulary that whole categories of crime are no longer being investigated. In many thousands of cases crimes are not even recorded: supposedly because of cuts in police budgets. Prisons are becoming increasingly crowded, worse managed and less hygienic as staff cuts bite ever deeper. Railway travel is becoming more expensive, bus services are being cut, housing is becoming dearer and scarcer, threats to the National Health Service are a constant theme of the news.

The cost of the cuts, in terms of quality of life, is immense: though it is intrinsically incalculable. The naive Economists say that cutting public spending is the only possible response to the ongoing failure of the economy; with the implication that both personal earnings and living standards for the vast majority of the population must continue to decline while the rich become richer and more enabled to avoid taxes.

A national strategy is needed to face the real ecomnomic issue that underlies all others: the failure of politicians and Economists to recognise that only an increase in the productiveness of activities really matters. The crucial difference between productiveness and 'productivity' [in which Britain is also embrarrassingly bad] must be exposed: only then can robust economic growth be envisaged,

This is set out in my recent book:Sinking Britain; as advertised in this blog,

Thursday, 4 September 2014

As the member countries of NATO gather to heap obloquy of Putin's Russia, it behoves British observers to remember the history of the relationship of the UK and Russia. Apart from the distraction of the 'Great Game' around Afghanistan [which has recurred around Afghanistan from around 1800 until the present day; though the west simply helped the Afghans defeat Brezhnev and subsequently Russia has kept aloof while the Afghans have seen off Nato forces] and the stupid, costly Crimean War of 1854-6 Britain and Russia have never been in open conflict.

The rise of a bellicose Germany in the period after the Franco-Prussian war of 1870 - reinforced by the contrarian personality of Kaiser Wilhelm II - caused the autocratic Russia to seek an unlikely ally in republican France and led Britain to enter into detailed discussions with the French government and military on how British forces could be deployed on the continent if circumstances [which were easily foreseeable] led to a war situation between Britain and Germany; as happened with the German invasion of Belgium in 1914. The actual pattern of events that led the great Empires on the continent to sleepwalk to their own destruction has been well retold on the centenary, and needs no gloss here. Suffice it to recall that the British government invited Field Marshal Kitchener [the greatest general of the past generation] to take control of the whole enterprise as Minister for War. He immediately recognised what sort of war it was going to be, and began recruiting a mass army of over a million men; let nobody blame the field commanders for the awful losses that followed: the greatest military minds at that time regarded the casualties as inescapable.

Russia was plunged into a similar trench war, after appalling generalship lost them the chance of marching straight on to Berlin while the Germans were concentrating on the Western Front. By the middle of 1916 the regime was cracking under the human and material demands of the war, and the British decided that the best thing that they could so was to send Kitchener to advise the Tsar on how to pull things together. Kitchener was killed at sea on the way to Russia and the regime duly collapsed. From 1917 Russia had a dysfunctional, brutal, ideological government that became increasingly paranoid about 'encirclement' by the capitalist world. British engineers from Vickers whose input was essential for the industrialisation programme were put up in a show trial as 'saboteurs' and relations with the capitalist world generally worsened in the 'thirties. Hence Lenin's successor [and probable murderer] Stalin entered a 'pact with the devil' - Hitler - which he loyally kept until Hitler invaded [and almost occupied] Russia. Only the combined forces of the so-called USSR and the British Empire and the USA could defeat Hitler, which they did at immense cost in the form of Russian lives and British wealth. The USA was thereafter militarily and economically predominant: but after occupying half of Europe after the defeat of Germany [including redrawing the frontiers of Germany and Poland] the Soviet regime wrung enough out of the human and material resources that they could plunder to be able to maintain an increasingly clunky defence against the capitalist 'west': responding to that military consultation in Europe [as a loyal ally of the USA] drove Britain closer to bankruptcy.

Since the collapse of the USSR the cold-war mentality of the NATO allies has been maintained: and it now risks punging us into another tragedy that can properly be avoided: see part 3, coming next.

Wednesday, 3 September 2014

One of the oldest buildings in Moscow is a small late-medieval house that has traditionally been known as the English Embassy. It is reputedly where the Ambassadors sent by Queen Mary I [Mary Tudor] stayed when they had made the overland journey to Moscow from Archangel, the northerly port to which they had made a hazardous voyage right round Scandinavia. At that time, the Swedish empire cut Russia off from the Baltic; making the far north the only maritime access to European Russia. To this day the Kremlin exhibits superb pieces of Tudor silver: ambassadorial gifts brought for the Tsars by Ambassadors from Mary and later from Elizabeth I [to whom Ivan the Terrible proposed marriage as the firmest form of alliance that could be forged]. While Elizabeth was conscious of the relative isolation of her protestant regime in western Europe, she recognised affinity with the almost-landlocked empire of Muscovy and possibilities for joint working were sketched out.

Through the first half of the seventeenth century contacts were maintained intermittently, while England established the first overseas empire, and Russia concentrated on consolidating its territory and probing for expansion into central Asia. When the gigantic Peter I - the Great - decided to break out into Europe via the Baltic Sea, he decided that he must learn about ships and navies: so he travelled under a very flimsy incognito to western Europe. He learned about military science in Germany and France, then about shipbuilding and naval operations in the Netherlands and England where he spend many months working in the Deptford shipyard. Returning to Russia, he decreed that a muddy estuary in the northwest corner of European Russia should become a port and the capital city: bringing in architects and engineers to the new St Petersburg to make his dream a reality. Then by waging war successively against Sweden and Turkey he opened coastal access to the Baltic and the Black Sea.

During the eighteenth century Britain expanded as a global economic power by the processes of trade and colonisation, all based on marine trade and a strong navy; and Russia emerged as a power by virtue of fabulous wealth in natural resources as it spread its sovereignty over more of the Eurasian continental mass. Right at the end of the century, revolutionary France - especially after Napoleon took power - found that their emergence as the predominating power in Europe was threatened by Britain and by Russia. Napoleon's Moscow campaign was a disaster on land which was even greater than the catastrophic destruction of French and Spanish naval power at Trafalgar. Britain and Russia triumphed globally: Britain compensated for the loss of the United States by consolidating power in India, settling Canada, Australia and New Zealand, and adding a network of coastal colonies in all the continents.

Then began the 'Great Game': as the British Raj spread northward towards Afghanistan, Russia was capturing colonies in Central Asia and was shortly to establish colonies adjacent to Afghanistan. By 1850 colonial rivalry in Asia also spread to the Turkish empire. Russia wanted to emancipate the millions of fellow-slavs who were Turkish subjects, and also wanted to gain a longer coast on the the Black Sea. Britain and France decided to curb Russia's ambitions in the Balkans and attacked Russia in the Crimean war. That descended into costly stalemate, and was ended in a face-saving peace. By the end of the nineteenth century the British and the French recognised in Russia their natural ally for the containment of a newly-united and aggressive Germany. Then came the tragedy of the First World War: which I will examine next.

Monday, 1 September 2014

Britain's official National Debt has increased by £30 BILLION due to an EU ruling [adopted by the national statisticians] that counts the debts outstanding by Network Rail - already guaranteed by the state - shall be counted as part of the national debt. Since the debt is increasing anyway, as the deficit on government spending rolls on, this is just a small addition to a sum that will soon be equal to three-quarters of the reported turnover of the economy in a year [the Gross National Product]. Gideon Osborne's abject failure to eradicate the month-by-month deficit becomes even more obvious; and the deficit on Britain's balance of payments with the rest of the world also continues to increase.

So what security can Britain offer to the aliens who continue to lend money to the state? What is the 'value' of the assets that are at the command of the government? Over the last forty years there has been a massive sell-off of the formerly nationalised industries and of the land-bank that used to be occupied by airfields, shipyards, barracks and ministry buildings: so the actual physical and financial assets at the command of the government are about the least ever. They go no distance to meeting the perceived 'value' of the debt.

What about the notion that the British people, all taken together, owe the national debt: what capacity does the nation have to buy back the debt from foreign owners? The answer is simple and painful: personal estates are overwhelmingly in debt; most households have no net assets. So what about firms? Surely they have massive assets? Yes, they do: but they belong to the shareholders and the bondholders in the companies, many of which belong to foreign companies and individuals. The 'value' of companies - their day-by day share price, multiplied by the number of shares issued - can change dramatically: the biggest supermarket chain, Tesco, fell by 10% last Friday. Nobody knows what Tesco is really 'worth', though it is clear that the turnover and profitability of the company has declined over recent years. The directors fear that the decline could continue, so they have brought forward the installation of a new chief executive. There are deeply in competition with German-originated companies that specialise in no-frills low-priced goods. The German companies plan to increase the number of their stores quickly, meaning that the number of square metres of retail space in total is increasing: while the turnover per square metre in Tesco and Morrisons and other stores declines. Hence competition is inexorably decreasing the 'value' of the less-successful companies' estates.

Yesterday's Sunday Telegraph ran a feature on Manchester City Football Club, asking how much the 'BRAND' is 'worth'. It was noted that the owners of the company that controls the club have 'invested' £930 million - mostly in buying and paying managers and players - with the result that trophies have been won and thus a global reputation which could eventually challenge that of Manchester United has been achieved. This could enable to club to sell shirts and other equipment and sell access to firms to share in the kudos of the club; enabling observers to place an estimated 'value' of £330 million on the brand. But how much of that 'value' could be unlocked in a sale of the club? Is it a British asset? It is located in Britain and registered in British law; but it belongs to the Middle Eastern 'investors' who supplied most of the £930 million. It is of no use as a guarantee of the national debt.

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About Me

I have had a very fortunate life, in that I have been able to study the economy and Economics for more than forty years. I taught Economics, the History of Economic Thought and some Economic History at University level for over twenty years; I was CEO of an international professional Institute in financial services for more than a decade; served as head of a large Business School and have been Pro-Vice-Chancellor of a major university; and I have lectured and examined all over the world. My introductory text on insurance was translated into fourteen languages and my writings over a wide range of topics have been available worldwide.

Throughout these years I have quietly challenged the normative assumptions that underlie academic Economics; but for decades I recognised that the hegemony of dogma was so impenetrable that any frontal assault on the self-styled ‘profession’ would be brushed aside by the professoriate that had been appointed in a pyramid of patronage. Now – through the credit crunch and the even more grave sovereign debt crisis – it is very widely recognised that Economics is a failed subject: it fails to provide any adequate analysis of the situation or any new programme for moving the economy forward. The time has come for the world to understand how fundamental the failings of Economics are.

Fortunately we can begin to move forward in understanding by restating principles that were developed before Economics was set out in its modern form in the eighteen-seventies. A sound understanding of the economy begins in the recognition that all decisions and actions in the economy are taken by human individuals, acting on their own or as the agents of corporate persons [companies, registered charities etc] or as servants of international sovereign persons that are known as states [and their governments, local authorities and state agencies].

Persons are not impotent incidents in markets: markets are the creations of persons and any market can be abused or upset by persons with unusual ambition, drive, inspiration or dishonesty. This approach is followed in my simple little book, Personal Political Economy: follow the link.

In this blog I make comments on people and events from the perspective that is set out in the book: and I will not hesitate to repudiate any portion of the book – or any blog – that is invalidated by emergent reality.I thrive on criticism, and welcome it.